Despite reporting blockbuster earnings, the best sales growth in a decade and a stellar outlook which sent its stock soaring, there were some lagging concerns surrounding the latest Walmart results: will rising tariffs on Chinese imports lead to sharply higher prices at the “everyday low prices” retailer?

As if to validate fears, overnight Bloomberg reported that Walmart has asked its cosmetics suppliers to “consider sourcing their goods in countries outside of China,” a sign that the world’s largest retailer is i) worried about escalating costs and ii) hopes to dilute the impact of the Trump administration’s looming tariffs by reorganizing its supply chains.

In an August 7 email as seen by Bloomberg, titled “potential alternative plan for WMUS D46 orders” and sent from Walmart’s procurement division to some of its cosmetics suppliers, the company warned that a “large amount” of items in the cosmetics category will be caught under the umbrella of the most-recent proposed levies on Chinese goods. The list of Chinese goods that could get hit with additional tariffs includes lipstick, eye makeup, powders, shampoo and other haircare products.

More importantly, the letter asks suppliers if they have facilities outside of China, and if not, “whether they would consider investing in some to broaden their sourcing ability.”

“We are closely monitoring the tariff discussions and are actively working on mitigation strategies, particularly in light of potentially escalating duties,” Walmart spokesman Randy Hargrove said. “One of those mitigation strategies is to understand what our suppliers are doing and what their plans and alternatives are.”

The company itself is also stumped: in the email to makeup companies, Walmart admitted it too was actively looking for other ways to circumvent the tariffs, asking its suppliers, “Any resources or ideas so far?”

Meanwhile, downplaying the impact of tariffs, on its Thursday conference call Walmart Chief Financial Officer Brett Biggs said the impact of the tariffs “is difficult to quantify.” He also said that the company wasn’t too concerned about its reliance on Chinese suppliers: “We buy more merchandise, by a wide margin, in the U.S. than from any other country,” the company said.

While that may be true for WalMart’s food business, the company’s sprawling supply chain includes more than 100,000 vendors around the globe. Edward Jones analysts confirmed that while Walmart has “made a big push on U.S.-made stuff, but it’s still small” as Walmart “does source a lot from China.” Less obtrusively, in its company filings, Walmart concedes that U.S. foreign trade policies could hurt its results, saying in its annual report that tariffs “are beyond our control.”

To be sure, the worst case scenario for WalMart could be dire: MoffettNathanson analyst Greg Melich said Thursday that a full-blown Chinese trade war could eliminate half of the retail industry’s earnings growth next year. Retailers have two primary responses to the tariffs, analysts say: Raise prices or get their products elsewhere, and with the latest consumer confidence report showing sentiment sliding due to fears of sharply higher consumer inflation resulting in a collapse in spending plans, companies may have no choice but to find alternative suppliers.

And speaking of a “worst case scenario” not only for WalMart but the rest of corporate America, the world’s biggest shipping company warned that the US economy would be hit “many times harder than the rest of the world” by an escalating global trade war.

Soren Skou, the CEO of A.P. Moller-Maersk said at the company’s headquarters on Friday that the fallout of the current protectionist wave “could easily end up being bigger in the U.S.” He calculated that while tariffs would slow global annual trade growth by 0.1 to 0.3%, for the U.S. the effect could be “perhaps 3 or 4 percent” and added redundantly “that would definitely not be good.” And since Maersk transports 20% of the world’s seaborne consumer goods, it is in a unique, if perhaps conflicted, position to gauge the fallout of tariffs on trade flows.

Maersk – which recently broke with its culture of steering clear of any political debate to criticize the trade policies of U.S. President Donald Trump -focuses on trade flows between Europe and Asia and, despite its warnings, has so far not been hurt directly by tariffs. In fact, demand grew 4% in Q2, sending its shares sharply higher in the past month after a precipitous decline since last summer amid rising global trade tensions. But Skou warned that may change if the U.S. starts targeting consumer goods.

“The first thing the American importers would do if tariffs are put on Chinese consumer goods would be to buy in Vietnam, in Indonesia or elsewhere in Asia,” Skou said. “Big U.S. consumer brands like Nike produce in all of Asia, not just in one country, so there will be a substitution effect.”

The question for Walmart as well as for others, is how much this global supply chain realignment will cost; considering that WalMart was leery to bring it up, we can imagine the answer is material.

“The other factor is that there’s a lot of stuff that’s now imported into the U.S. that just isn’t produced anywhere within the U.S.,” Skou said. “You can’t get Nike sneakers or iPhones that are produced in the U.S. So it will end up being pushed on to the consumer.”

Perhaps not iPhones, but for the sake of US consumers let’s hope that Walmart can at least find some good, cheap and most importantly domestic replacements to Chinese lip gloss and eyeliner.

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